STOCK MARKET NEWS: Dow, S&P, Nasdaq jump, Apple’s update, Target CEO talks future, Musk vs. Twitter

American Eagle Outfitters Inc on Wednesday missed Wall Street estimates for adjusted profit and said it would pause quarterly dividend as it fortifies its finances against a hit from inflation, sending its shares down 13% after market.

The company would also put a hiring freeze, reduce non-critical expenses and lower capital spending, Chief Executive Officer Jay Schottenstein said in an earnings call.

Aerie maker American Eagle, which continues to battle higher freight and labor costs, said its gross margins depleted in the quarter ended July 30, further pressured by steeper discounts and increased promotional activity to get rid of excess spring and summer goods.

The company's net revenue came at $1.20 billion, compared with $1.19 billion a year earlier, in-line with analysts' expectation, according to IBES data from Refinitiv.

Excluding items, American Eagle earned 4 cents per share, largely below estimates of 13 cents.

The company had paid shareholders a dividend of 18 cents in the previous quarter.

Glaukos gained more than 18% Wednesday. The company developing novel therapies for treating glaucoma, corneal disorders and retinal diseases announced positive topline data for both Phase 3 pivotal trials of iDose TR.

iDose TR is sustained-release travoprost implant that provides sustained substantial reductions in intraocular pressure for at least one year.

Once all travoprost is released, the iDose TR is designed to be removed and replaced with a new iDose TR, thus potentially offering an alternative to daily eye drop treatment for glaucoma.

Based on the combined efficacy and safety results from both Phase 3 pivotal trials, Glaukos plans to move forward with its plans for an NDA submission to the U.S. FDA for the slow-release iDose TR model, with an expected FDA review and decision completed by the end of 2023.

GameStop store in the Jackson Heights neighborhood of New York City, New York. January 27, 2021. (REUTERS/Nick Zieminski/File Photo)

Gamestop is higher in extended trading. The video game, consumer electronics, and gaming merchandise retailer announced a partnership with crypto exchange FTX US and reported fiscal second quarter results.

The partnership intends to introduce more GameStop customers to FTX’s community and its marketplaces for digital assets. In addition, GameStop will begin carrying FTX gift cards in select stores.

Gamestop’s net sales for the three months ended July 30 were $1.136 billion for the quarter, down slightly from $1.183 billion in the prior year’s second quarter.

The net loss widened to $108.7 million from $61.6 million.

Selling, general and administrative expenses were $387.5 million for the quarter, representing a sequential decline of 14.3% from the first quarter of 2022 and reflecting, in part, the company’s focus on right-sizing costs following a period of significant investment in long-term initiatives.

Sidus Space shares jumped more than 14% Wednesday. The space-as-a-service satellite company inked a five-launch deal with Elon Musk’s SpaceX, beginning early 2023.

The company has designed and is manufacturing LizzieSat TM, a vehicle that offers custom payloads tailored to maximize customer return on investment.

The SpaceX launches will support previously announced contracts with NASA and Mission Helios as well as prospective customers that Sidus continues to layer into its pipeline in all areas including payload hosting and capturing space-based data.

Elon Musk's picture on a smartphone along with representations of Dogecoin, illustrated June 16, 2022. (REUTERS/Dado Ruvic/Illustration/File Photo)

The $258 billion racketeering lawsuit accusing Elon Musk of running a pyramid scheme to support the cryptocurrency Dogecoin has expanded, adding seven new investor plaintiffs and six new defendants including his tunnel construction business Boring Co.

According to an amended complaint filed on Tuesday night in Manhattan federal court, Musk, his electric car company Tesla Inc, his space tourism company SpaceX, Boring and others intentionally drove up the price of Dogecoin more than 36,000% over two years and then let it crash.

By doing so, the defendants "profited tens of billions of dollars" at other Dogecoin investors' expense, while knowing all along that the currency lacked intrinsic value and that its value "depended solely on marketing," the complaint said.

Tesla, SpaceX and Boring did not immediately respond on Wednesday to requests for comment.

The original lawsuit was filed in June. Shortly afterward, Musk, the world's richest person, tweeted that he would "keep supporting Dogecoin," and in an interview said "people that work around the factory at SpaceX or Tesla" asked him for that support, the amended complaint said.

Other new defendants include the Dogecoin Foundation, which calls itself a nonprofit providing governance and support for Dogecoin. It could not immediately be reached for comment.

The $258 billion in damages is triple the estimated decline in Dogecoin's market value since May 2021. That was around the time Musk, playing a fictitious financial expert on a "Weekend Update" segment of NBC's "Saturday Night Live," called Dogecoin "a hustle."

Dogecoin traded at about 6 cents on Wednesday, down from around 74 cents in May 2021.

Butterball President and CEO Jay Jandrain discusses the demand for turkeys ahead of the holidays amid inflation.

ECONOMY

Fed's Brainard warns interest rates need to remain high for 'some time'

Federal Reserve Vice Chair Lael Brainard signaled on Wednesday that policymakers are prepared to fight inflation for as long as needed until prices start to cool.

Federal Reserve Vice Chair Lael Brainard said Wednesday that she expects the U.S. central bank to raise interest rates higher this year and to keep them elevated at those levels until scorching-hot inflation slows down. 

Speaking at a conference hosted by the Clearing House and Bank Policy Institute, Brainard stressed that policymakers remain focused on bringing inflation closer to the Fed's 2% goal and will need to push the interbank lending rate higher in order to do so.

"We are in this for as long as it takes to get inflation down," Brainard said. "So far, we have expeditiously raised the policy rate to the peak of the previous cycle, and the policy rate will need to rise further."

LIFESTYLE

UPS to hire 100K holiday workers ahead of busy delivery season

UPS announced Wednesday that it's planning to hire over 100,000 seasonal workers for the upcoming holiday season. It comes after Michaels announced its own holiday hiring plans.

UPS is officially kicking off its holiday hiring. 

The major package carrier announced Wednesday that it's looking to hire more than 100,000 employees as it braces for another frenetic season. That's similar to the holiday seasons of 2021 and 2020. 

UPS said it's seeking full- and part-time seasonal delivery and CDL drivers, package handlers and driver helpers, and that it's trying to fill these positions quickly. 

Ubisoft event (Courtesy: Ubisoft)

Ubisoft fell more than 20% in Wednesday morning trading. Chinese internet and technology company Tencent invested 300 million euros ($298 million) in the French video game maker, valuing the company at €80 per share, or $10 billion.

The investment lessens chances that Tencent, or another company, would acquire Ubisoft.

Tencent will not be able to sell its shares in Ubisoft for a period of five years (and beyond will give the Guillemot family a right of priority) and will not be able to increase its stake in Ubisoft beyond 9.99% of Ubisoft's capital and voting rights for a period of eight years.

In addition, Tencent is providing Ubisoft's parent company, Guillemot Brothers Limited, with a long-term unsecured loan to refinance its debt and provide additional financial resources that can be used to acquire equity in Ubisoft.

Ubisoft’s brands such as Assassin’s Creed, Brawlhalla, For Honor, Far Cry, Tom Clancy’s Ghost Recon, Just Dance, Rabbids, Tom Clancy’s Rainbow Six, The Crew, Tom Clancy’s The Division, and Watch Dogs.

Major League Baseball Players Association Executive Director Tony Clark in New York, Fri., Mar. 11, 2022. (AP Photo/Richard Drew, File)

The Major League Baseball Players Association is joining the AFL-CIO, executive director Tony Clark said Wednesday.

The move comes as the MLBPA is attempting to unionize minor leaguers following decades of opposition and in the aftermath of a nearly 100-day lockout that delayed the start of the season. Clark made the announcement alongside AFL-CIO president Liz Shuler during an event at the National Press Club.

The MLBPA is the 58th union to affiliate with the AFL-CIO, the largest labor federation in the U.S. with 12.5 million members. The AFL-CIO's Sports Council already included players' associations from the NFL, National Women's Soccer League, United Soccer League and U.S. Women's National Team.

The MLPBA on Tuesday asked management to voluntarily accept the union as the bargaining agent for minor leaguers. Bruce Meyer, the union’s deputy executive director, sent a letter to MLB Deputy Commissioner Dan Halem that claimed a majority of roughly 5,400 minor leaguers had signed authorization cards.

The MLBPA, which reached its first collective bargaining agreement for major leaguers in 1968, launched the minor league unionization drive Aug. 28. Players with minor league contracts, who earn as little as $400 weekly during the six-month season, would become their own bargaining unit within the MLBPA.

Baseball and the players settled on terms of a new collective bargaining agreement in March, ending the sport’s ninth work stoppage after 99 days and clearing the way for a full, 162-game regular season with opening day pushed back a week.

T-Mobile logo on a building in Los Angeles, Calif., May 11, 2017. (REUTERS/Mike Blake)

T-Mobile US Inc is doubling down on 5G services by selling its wireline business to Cogent Communications Holdings Inc in a deal it expects to result in a $1 billion pre-tax charge.

The deal announced on Wednesday has a value of $1 and under it Cogent will also offer certain services to T-Mobile for $700 million for the next four and a half years after the transaction closes.

T-Mobile has been shifting its focus away from the wireline business, which includes assets from its $26 billion acquisition of Sprint Corp in 2020, as the carrier expands its 5G and high-speed internet services.

Last year, the company earned $739 million in revenue from the business that houses communications systems, data processing equipment and fibre optic cable.

Cogent said the purchase would strengthen its offering to consumers and enterprises, and added the U.S. long-haul network could eventually replace its current leased network and help expand its product set.

The company does not plan to issue new debt or equity to finance the acquisition and will continue to maintain its current dividend plan.

The deal is expected to close in the second half of 2023, and T-Mobile said it would book the charge in the third quarter of 2022.

Apple CEO Tim Cook will teased his upcoming event Tuesday which is expected to bring a number of key enhancements to major products including the iPhone and iWatch ahead of the key holiday selling season.

Amazon warehouse built on the former Cerro Wire site on June 9, 2022, in Syosset, New York. (Howard Schnapp/Newsday RM via Getty Images / Getty Images)

One of the largest labor unions in the United States has launched a new division focused on assisting Amazon employees, amid an evolving effort by workers to unionize.

In a statement, the International Brotherhood of Teamsters called Amazon "one of the world’s most dangerous employers" and said its new arm would work to unite Amazon employees, secure workplace protections in the warehouse and defend workers from "unchecked exploitation."

"For 120 years, the Teamsters have proudly and ferociously protected transportation, logistics, and delivery workers, and we refuse to allow Amazon to continue to abuse and disrespect the more than one million Americans it employs," Teamsters General President Sean M. O’Brien said.

He added: "The Teamsters are best positioned to coordinate and secure guaranteed protections for these workers, and Amazon knows it. Our new division affords a nationwide network of resources to all Amazon workers, behind the wheel of any truck or hard at work in any facility, to strategize with the union, mobilize in their communities, and succeed together."

EXCLUSIVE: Assurant, an insurance firm that partners with Apple on its trade-in program, is expecting an uptick in volume following the tech giant's "Far Out" event on Wednesday, where the company is widely expected to announce the iPhone 14. 

TECHNOLOGY

Apple's iPhone 14 launch may spur uptick in trade-in volumes

The iPhone 14 is expected to be announced during Apple's "Far Out" event on Wednesday. The event will stream live starting at 10 a.m. Pacific Time.

Gas Prices (AAA)

The average price of a gallon of gasoline slipped on Wednesday to $3.764, according to AAA. Tuesday's price was $3.779. 

Gas has been on the decline since hitting a high of $5.016 on June 14.

Diesel's price slipped to $5.050 per gallon.

Oil Drilling (Reuters)

Oil traded turned higher on Wednesday as COVID-19 curbs in China and further interest rate hikes continued to raise concerns about demand.

U.S. West Texas Intermediate crude futures traded around $87.00 a barrel.

Brent crude futures traded around $93.00 a barrel after slipping 3% in the previous session.

Oil pared strong gains made on Monday after the Organization of the Petroleum Exporting Countries (OPEC) and their allies, a group known as OPEC+, decided to cut output by 100,000 barrels per day in October.

Investors are also watching for further interest rate hikes to curb inflation. The European Central Bank is widely expected to lift rates sharply on Thursday. The U.S. Federal Reserve meeting will follow on Sept. 21.

Weekly U.S. inventory reports from the American Petroleum Institute and Energy Information Administration will be released a day later than usual, because of Monday's holiday.

Bitcoin was trading around $18,000, after declining in five of the last six days.

The cryptocurrency is down more than 4% over the last two days. For the week, Bitcoin was trading lower by more than 4%. Bitcoin is down more than 59% year-to-date.

Ethereum was trading around $1,500, trading up more than 2% in the past week.

Dogecoin was trading around 5 cents and is down more than 4% in the past week.

United Airlines plane (iStock)

United Airlines has drawn a line in the sand with the Federal Aviation Administration (FAA) concerning its flights at New York's John F. Kennedy Airport (JFK).

United says if the FAA doesn't grant the airline additional flights, it will end service at the busiest New York-area airport in October.

United Chief Executive Scott Kirby made the request to the FAA last week, urging an increase in capacity, according to an email to employees seen by Reuters.

"If we are not able to get additional allocations for multiple seasons, we will need to suspend service at JFK, effective at the end of October," United's email said.

Read more on the story here: United Airlines may end JFK service without more flights

Theranos founder Elizabeth Holmes is asking for a new trial after being convicted on fraud charges earlier this year, now claiming that a witness for the prosecution came forward expressing regret over how his testimony against her was presented to the jury.

Attorneys for Holmes filed a motion in federal court Tuesday, citing "newly discovered evidence" pertaining to Dr. Adam Rosendorff, a former Theranos lab director and key government witness.

According to the filing, Rosendorff called Holmes and one of her attorneys last month seeking a meeting before driving to the disgraced founder's home and having a conversation with her partner, William Evans.

Holmes' attorneys wrote that Rosendorff was "seemed to be in distress and his voice was trembling" when he first approached Evans on Aug. 8, and that the witness "explained that he wanted to speak to Ms. Holmes because it would be ‘healing for both himself and Elizabeth to talk.’"

For more on the story, click here: Elizabeth Holmes asks for new trial, claiming 'newly discovered evidence' from witness